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Biglari prevails in proxy fight over Steak ‘n Shake

Shareholders of the company that owns Steak ‘n Shake and Western Sizzlin’ have voted down a dissident shareholder’s attempt to oust current leadership and put its directors in control of the family oriented chains.

The vote, announced Thursday at the shareholders meeting of Biglari Holdings Inc., leaves Warren Buffett disciple Sardar Biglari in control of the company that bears his name.

Biglari Holdings is a holding company whose assets aren’t limited to restaurant operations. For instance, it also owns Maxim, a men’s magazine. But Steak ‘n Shake was what brought Biglari to prominence within the industry and the general business community—ironically through a shareholder revolt. Biglari purchased a minority stake in the venerable chain and used it as leverage to force out the company’s leaders with the help of fellow shareholders and put himself in control.

Groverland Capital, a hedgefund that owned only a small portion of Biglari shares, made a similar try to bounce Biglari and his board.  Led by Minneapolis investor Nick Swenson and boasting several restaurant veterans on its senior team, the investment concern criticized Biglari and his team to fellow shareholders, arguing that corporate governance was lax, Biglari paid himself too much money, and that he never really turned around Steak ‘n Shake as he claimed. It put forth an alternate slate of directors that include Swenson and Jim Stryker, a veteran of Marie Callender’s and Perkins.

Groverland also expressly said that it would replace Biglari with Gene Baldwin, a partner who formerly served as CFO of Benihana and was briefly CEO of the Fazoli’s fast-casual chain.

Biglari Holdings responded with its own missives to shareholders, characterizing Groverland as a bush-league investor that wasn’t telling the truth.

The proxy fight culminated in Thursday’s tally of shareholder’s votes. A preliminary count led to the announcement that Biglari’s incumbent slate of directors had kept their jobs.

Neither side has yet commented publicly. 

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